May 14, 2020

Racketeer Influences and Corrupt Organizations Act

Racketeer Influences and Corrupt Organizations Act

The Likely Insurance Treatment of Treble Damage RICO Judgments
      Alvin K. Hellerstein and Elizabeth A. Mullins, 42(1): 121–34 (Nov. 1986)
This Article discusses the extent to which the payment of RICO treble damages is or can be covered by insurance. The Article focuses on the distinction between punitive and compensatory damages in the treble damage context. It analyzes not only RICO decisions but also analogous treble damage statutes—primarily the antitrust laws.

RICO as a Vehicle for Intracorporate Claims by Nontarget "Perpetrator" Corporations
      Richard I. Werder, Jr. and John M. Newman, Jr., 46(4): 1391–1406 (Aug. 1991)
Corporate claims are increasingly being advanced under RICO against directors and officers whose activities allegedly caused the corporation to wrong a third party, with eventual adverse consequences for the corporation. This Article addresses the standing problems posed by this application of RICO. It argues that RICO, standing in these circumstances, should be confined to third parties who are targets of the corporate RICO violation and should not be conferred upon the nontarget "perpetrator" corporation itself.

RICO and the Due Process "Void for Vagueness" Test
      George Clemon Freeman, Jr. and Kyle E. McSlarrow, 45(3): 1003–1011 (May 1990)
The scope of the civil sections of the RICO have increasingly been the subject of scrutiny, particularly in their effect on the conduct of business. This Article examines concerns raised by RICO that are at the intersection of issues relating to punitive damages and the vagueness doctrine. The Article concludes that these concerns are valid in the civil as well as criminal context and that RICO is unconstitutionally vague.

Further Progress in Defining Constitutional Constraints on Punitive Damages and Other Monetary Punishments
      George Clemon Freeman, Jr. and Makram B. Jaber, 61(2):517—568 (February 2006)
This article updates an earlier article by Freeman that was published in the February 2002 issue of The Business Lawyer on the status of the United States Supreme Court's rapidly evolving jurisprudence on constitutional constraints on punitive damage awards. Since then, the Court in State Farm Mutual Automobile Ins. Co. v. Campbell reinterpreted and revised the three factors set forth earlier in BMW of N. Am. Inc. v. Gore for determining whether a punitive damages award was "grossly excessive" and therefore constitutionally prohibited. This article describes State Farm's new guidance, examines how lower federal and state courts have responded to it, and suggests possible areas where further guidance by the Court may be needed. The 2002 article also discussed the potential applicability of due process constraints, particularly the requirement of fair notice and the prohibition of "grossly excessive" punishment, to other monetary punishments authorized or imposed by state or federal government. In that broader context this article discusses several opinions dealing with due process challenges to statutory or administrative prohibitions or other limitations on timely judicial review of EPA administrative orders under the Clean Air Act and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

Civil Liability for Aiding and Abetting
      Richard C. Mason, 61(3):1135—1182 (May 2006)
Civil liability for aiding and abetting provides a cause of action that has been asserted with increasing frequency in cases of commercial fraud, state securities actions, hostile takeovers, and, most recently, in cases of businesses alleged to be supportive of terrorist activities. The U.S. Supreme Court, in its 1994 decision in Central Bank of Denver, N.A. v. First Interstate Bank of Denver , ended decades of aiding and abetting liability in connection with federal securities actions. However, the doctrine since has flourished in suits arising from prominent commercial fraud cases, such as those concerning Enron Corporation and Parmalat, and even in federal securities cases some courts continue to impose relatively broad liability upon secondary actors. This article reviews Central Bank and its limitations, before turning to an analysis of the elements of civil liability for aiding and abetting fraud. The article then similarly identifies and analyzes the elements of liability for aiding and abetting breach of fiduciary duty, which predominantly concerns professionals, such as accountants and attorneys, that are alleged to have assisted wrongdoing by their principal. The analysis then examines aiding and abetting liability in the context of particular, frequently–occurring, factual matrices, including banking transactions, directors and officers, state securities actions, and terrorism. The article concludes by summarizing emerging principles evident from judicial decisions applying this very flexible and potent source of civil liability.

Closing Time: You Don’t Have to Go Home, But You Can’t Stay Here
      Richard D. Bernstein, James C. Dugan, and Lindsay M. Addison, 67(4): 957 - 976 (August 2012)
In a significant trend, U.S. courts are increasingly rejecting cases involving foreign plaintiffs or foreign conduct. This trend was accelerated by the U.S. Supreme Court’s decision in Morrison v. National Australia Bank Ltd., which established that U.S. securities laws cannot be applied extraterritorially. Lower courts have extended the presumption against extraterritoriality to other federal and state statutes.